Ex-Cincy IRS official doubts agency's explanation for Tea Party scandal

A woman who worked in the IRS Cincinnati office at the center of controversy over targeting of conservative groups says she doubts that the blame resides with front-line employees, as the agency has claimed.

By Rich Gardella and Lisa Myers, NBC News

A former manager at the IRS Cincinnati office at the center of the controversy over the targeting of conservative political organizations seeking tax-exempt status tells NBC News she doesn’t think low-level employees acted on their own in flagging them for further scrutiny.

But she also said that in her time at the IRS she has never known politics or partisan motivations to play any role in the office’s work, and doesn’t think it did in this case.

Bonnie Esrig, a 38-year IRS veteran, worked as an area manager in the Determinations Unit of the IRS’ Exempt Organizations department in 2011 and 2012. According to a federal audit and IRS Congressional testimony, some employees in the unit used inappropriate selection criteria to flag the applications of Tea Party and other conservative organizations for further scrutiny, according to an audit by the Treasury Inspector General for Tax Administration. (Esrig worked on tax-exemption status issues in the IRS office, but for other types of organizations, such as charter schools – not on the political advocacy groups cases at the center of the controversy. She retired from the IRS in January.)

The audit released last week by the Department of the Treasury’s Inspector General for Tax Administration found that IRS employees in that unit “targeted” conservative political advocacy organizations for additional review based on keywords in their organizations’ names, such as “Tea Party.”

Esrig said that recent media headlines reporting that “rogue” agents were responsible and questioning whether the Obama Administration had played a role, surprised her, given her first-hand knowledge of the unit and its work.

“Those were things that were not consistent with my knowledge of the way the organization works,” Esrig said.

Esrig said she doesn’t believe that a few employees in the Cincinnati office made the decisions to use the inappropriate selection criteria – as the IRS has claimed to Congress and as the Treasury Inspector General reported in its audit.

According to a congressional source, the IRS reported in a briefing to Congress that two “rogue” employees were responsible for the use of the criteria.

But Esrig said that doesn’t make sense based on her experience.

“The idea of two rogue employees,” Esrig said, “is inconsistent with the kinds of checks and balances that are inherent in the way the organization is set up.”

Nor does she believe the IRS assertion in its response to the Inspector General’s audit that the use of such inappropriate selection criteria were “mistakes” and that “front-line career employees … made the decisions.”

“Front-line employees (at the Cincinnati office) do not make key decisions about policy and how work is processed,” Esrig told us. “Work is reviewed by the managers. The employees don't operate autonomously where there is no review. The managers review.

“I think that even if an employee were to veer off in a separate direction briefly, I would be very surprised if anyone could sustain that before management became involved.”

But Esrig agreed with a second claim the IRS has been making: that the employees using the inappropriate criteria “acted out of a desire for efficiency and not out of any political or partisan viewpoint.”

She said that she never saw any political or partisan behavior in her time in that office and that she does not believe that there was any political motivation behind the use of the inappropriate selection criteria.

"I don't believe that it was in any way political," she said.

Likewise, she said, she never saw any hint of partisanship during her nearly four decades with the IRS.

The Inspector General’s audit stated that, when it asked various IRS personnel, from Acting Commissioner Steven Miller to employees in the Exempt Organizations Determinations Unit, whether there had been any outside influence in the selection of the criteria, “All of these officials stated that the criteria were not influenced by any individual or organization outside the IRS.”

Esrig told NBC News that she agrees that the IRS was not acting on any outside direction, presidential or otherwise.

“The way the IRS operates,” Esrig said, “over my years of experience in various roles, including working in Washington, D.C, I have never seen anything come down where the administration was directing the IRS to handle something in one way versus another way.”

Esrig told NBC News she thought Miller’s testimony to a congressional committee last week that employees were using keywords as a shortcut to select cases more efficiently -- and not for political reasons -- was entirely plausible.

“I absolutely believe that cases could be grouped for reasons that had absolutely nothing to do with partisan concerns,” she said. “I don't think that there is anything political about the grouping of cases.”

The IRS Exempt Organizations Determinations Unit is located on the fourth floor of the Federal Building at 550 Main St. in downtown Cincinnati. It is the location which receives, reviews and processes all applications for tax-exempt status, and from which letters of acceptance or denial originate.

The IRS has reported to Congress that approximately 140 employees – most of them in Cincinnati -- have been doingthe work on political groups cases,out of the IRS overall staff of 90,000.

In recent years, those employees handled an increase in the number of political advocacy organizations engaging in both social welfare and political activities applying for tax-exempt status under section 501(c)(4) of the Internal Revenue Code.

NBC News has attempted to contact other IRS employees -- present and former, in Cincinnati and elsewhere -- who were involved with the tax-exempt determinations during the period when the targeting occurred, but those employees either have declined to comment or have not responded to requests.

Esrig said she has not talked to any of her former colleagues about the controversy, and is speaking only based on her experience in that office.

“I believe that the employees were trying to do the best job they could with the guidance they were given,” she said.